Public Sector Has Some of Oldest Workers Set to Retire

Industry observers warn that the public sector is ill-prepared for the departure of this large segment of the workforce.

To comprehend the aging of the public sector, look no further than your mailbox.

Postal service workers register a median age of 52 – as high as any other industry, according to the Bureau of Labor Statistics. The only other group of employees that old work in jobs, literally, near death: funeral homes, cemeteries and crematories.

While workers across all sectors are closing in on retirement age, it’s in the public sector that occupations with some of the oldest workers can be found, which means that a new crop of public servants will soon need to step up and take the helm of government.

The Bureau of Labor Statistics compiled median ages for 227 industries for its 2012 Current Population Survey. A review of the data shows seven of the top 20 industry classifications with the oldest workers consist primarily of public employees, such as those working in public administration executive offices, libraries and public finance. As a whole, government employees tend to be older than other segments of the labor force.

When these workers will decide to retire – and how well prepared governments are to fill the void left by their absence – differs greatly from agency to agency.

The looming retirement of the vast segment of baby boomers has long occupied much attention. For years, economists and academics warned of an impending “silver tsunami.”

By and large, though, a sudden wave of retirements hasn’t yet happened.

Instead, many baby boomers remain attached to their jobs. The prevailing wisdom suggests boomers put retirement plans on hold when the economy tanked, and the hit their investment portfolios took likely provided further incentive to stay employed.

Rex Facer, an associate professor at Brigham Young University who studies workforce issues, said that as the economy improves, public employees could begin to head for the exits, particularly if they’re subject to pay freezes or feeling the effects of federal sequestration.

“Most organizations can’t close their eyes and pretend it’s not there,” he said.

About 38 percent of International Public Management Association for Human Resources members reported their eligible employees were postponing retirements in a survey earlier this year, down from 46 percent in 2012.

Of course, the private sector faces many of the same long-term challenges in losing workers to retirement, but the issue is even more pressing for some public agencies.

The Labor Department’s age data does not distinguish between all public and private employees, instead grouping them into industry classifications. Over half (52 percent) of workers in the “public administration” category – encompassing much of the sector besides education – were 45 years or older in the 2012 survey. By comparison, 44 percent of workers in all industries fell into this age bracket.

The median age of a public administration worker was 45.3 years, three years older than the workforce as a whole. Professional and business services, another one of the largest industries, recorded a median age of 42.6 years.

Facer expects the federal government to take a bigger hit from retirees than states and localities. The National Active and Retired Federal Employees Association launched a new website drawing attention to the experience lost from retiring federal workers.

At the local and state level, Facer said top administrative officials will likely be among the first to retire, along with senior managers two and three levels down.

The typical age of a government worker – and when they retire – varies from agency to agency. For the most part, those working in public safety usually retire at a younger age than their counterparts in other agencies; those in senior administrative positions hang on longer.

California Public Employees' Retirement System (CalPERS) provided Governing the following data showing average retirement ages for select groups of participating employees for fiscal year 2012-2013:

All CalPERS: 60

State Corrections Workers: 63

School Workers (non-teaching positions): 62

Miscellaneous Public Agency (mostly office workers): 60

Local Police and Fire: 54

California Highway Patrol: 53

CalPERS spokeswoman Amy Norris said there haven’t been any signs of an uptick in retirements so far this year.

Another recent survey conducted by the International City/County Management Association (ICMA) found 63.3 percent of city and county managers and other chief appointed local officials were older than 50. About a quarter of those surveyed were more than 60 years old.

Those in leadership positions throughout most governments are well aware of the fact that the public workforce is aging. However, industry observers warn that the sector, as a whole, is ill prepared for the departure of a large swath of employees.

“If everyone who could retire decided to retire tomorrow, it would be bad,” said Rob Carty, ICMA’s director of career services and Next Generation Initiatives. “We don’t have the number of people needed ready.”

Along with retiree pension obligations, of most concern for Carty and others is the huge loss of institutional knowledge set to take place when these workers leave.

To make matters worse, Carty notes that deputy managers serving department heads often fall in the same age bracket as their bosses. So, in some cases, a management staff may consist entirely of baby boomers around the same age.

In response, some governments established initiatives aimed at filling their pipeline with new leaders.

In California, local governments in Santa Clara and San Mateo counties participate in a talent exchange program, swapping employees for a few months to broaden their work experience and build leadership skills.

Carty said mentoring programs and internal sabbaticals further enable organizations to transfer knowledge from one generation to the next.

“There is a skill set, a temperament and desire to do that specific work,” said Carty, referring to city and county managers. “It’s not something you just jump into.”

Age of Workforce by Industry

The following data represents 2012 annual estimates of ages for employed persons. The most detailed-level industry is shown for those grouped together.

Industry

Median Age Rank

Median age

% Workers Age 45+

Postal Service

1

52.0

72.0

Funeral homes, and cemeteries and crematories

1

52.0

66.1

Personal and household goods repair and maintenance

3

51.9

64.9

Other general government and support

4

51.4

70.7

Religious organizations

5

51.3

63.9

Bus service and urban transit

6

51.2

66.1

Electric and gas, and other combinations

6

51.2

62.7

Labor unions

8

50.6

64.0

Offices of other health practitioners

9

49.6

61.5

Fuel dealers

10

49.4

60.5

Libraries and archives

10

49.4

60.5

Textile product mills, except carpet and rug

12

49.3

61.3

Animal production

12

49.3

57.7

Sewage treatment facilities

14

49.2

63.6

Sewing, needlework, and piece goods stores

14

49.2

63.2

Gift, novelty, and souvenir shops

16

49.1

55.9

Public finance activities

17

48.9

61.1

Metalworking machinery manufacturing

17

48.9

59.4

Administration of economic programs and space research (Public administration)